Record High Margin Debt With Most Traders Betting Against This Market

[galdur]

Its a perfect storm.

You have market participants who have borrowed to record levels in order to own stocks, totally leveraged up, yet the majority of traders are increasing their bets that this market is going to fall-and soon.

Below is an options statistics sheet of (NYSEARCA:SPY) SPDR S&P 500 ETF Trust, from today 6-2-15.

... more

http://seekingalpha.com/instablog/29482055-gregory-mannarino/4058646-record-high-margin-debt-with-most-traders-betting-against-this-market

[1715300956]

1715300956

[1715300956]

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[1715300956]

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[lindeanin]

Its a perfect storm.

You have market participants who have borrowed to record levels in order to own stocks, totally leveraged up, yet the majority of traders are increasing their bets that this market is going to fall-and soon.

Below is an options statistics sheet of (NYSEARCA:SPY) SPDR S&P 500 ETF Trust, from today 6-2-15.

... more

http://seekingalpha.com/instablog/29482055-gregory-mannarino/4058646-record-high-margin-debt-with-most-traders-betting-against-this-market

And this is why moon is in order!
 

[galdur]

I guess it was at the moon six months ago and hasn´t moved much since then.

[OROBTC]

...

galdur

You likely know that the S&P 500 blasted through its "Double Top" over the past four years. 

finviz apparently does not go far enough back to show that double top (at least as visibly as I have seen other longer-term S&P 500 charts), but the weekly chart DOES show the S&P 500 doubling over the past four years.  Checking their monthly chart shows a muted "second top".

I hold stocks (and am concerned...), but am well diversified into hard assets, etc.  Stocks (as well as most US real estate) have typically done well over a longer time frame.

"A perfect storm".  Nicely put.  It is coming.

[galdur]

Yeah OROBTC, I actually picked the wrong chart and the wrong time frame. This one below is much better. It does look a bit ominous doesn´t it?

[chennan]

No one can precisely predict the time of bubble burst. There are still many ppl who are buying up and ignoring the looming risk. They are attracted by the profit.

[NUFCrichard]

No one can precisely predict the time of bubble burst. There are still many ppl who are buying up and ignoring the looming risk. They are attracted by the profit.

Don't fight the fed, they have very deep pockets.  The money in those very deep pockets might be imaginary, but as long as everyone is happy to keep on investing all of the newly printed money in the world into the markets, the prices will keep going up.

It will come tumbling down, but I wouldn't care to guess when. I think we might see 2500 on the S&P before we see 1500 again.

[JackRipper]

No one can precisely predict the time of bubble burst. There are still many ppl who are buying up and ignoring the looming risk. They are attracted by the profit.

Trying to predict when the bubble will burst is a recipe for disaster. When you recognize a bubble, it's time to get out. That doesn't mean that you have to exit the market completely. You would definately want to get out of you cyclical stocks though. Especially if a large chunk of their shares are held by institutional investors.

All bubbles eventually burst and its a pretty good idea to have a good cash position when it finally bottoms out to take advantage all the bargains available. So a partial liquidation of one's position wouldn't be a bad idea.

Just hanging on and riding the bubble looking at the long term won't help either. All that will do is erase a decades worth of gains like it did in 2008.

[galdur]

I think they want to test the 200-day moving average, which they haven´t really touched since last year and before that well not for years. It´s currently at 2050 or so in the S&P. It would be a very natural correction and not necessarily indicative of any imminent crash. Maybe it´ll drop to say 1900 for a breather.

[galdur]

BTW, Finviz now has included BTC in its Forex section

[galdur]

Well, if this continues it could be the beginning of the correction I was talking about the other day. First test of the 200-day MA and then maybe 1900.

[johnyj]

Because FED is going to raise the interest rate, no one except bitcoin can fight FED

[galdur]

Because FED is going to raise the interest rate, no one except bitcoin can fight FED

The whole system is leveraged to the hilt and then some. The FED itself is leveraged like 80 to 1. Since bond yield and price move in opposite directions you can imagine the result for them and other financial institutions once they start hiking rates.

No, it won´t happen any time soon. What will though is QE number 4. Maybe it´s already in operation, this mess isn´t really famous for transparency.

[johnyj]

Because FED is going to raise the interest rate, no one except bitcoin can fight FED

The whole system is leveraged to the hilt and then some. The FED itself is leveraged like 80 to 1. Since bond yield and price move in opposite directions you can imagine the result for them and other financial institutions once they start hiking rates.

No, it won´t happen any time soon. What will though is QE number 4. Maybe it´s already in operation, this mess isn´t really famous for transparency.

Exactly, it won't happen any time soon

After QE123, major banks are sitting on 5X more base money than 2008, in fact they have printed all the money that they should print in future 30 years, and now all these money are in their pocket collecting interest from FED

With that amount of cash reserve, any kind of monetary policy that we have seen before will be useless: Raise the interest rate will not crash the market, bond negative return will not slow the bond buying frenzy, simply because there are too much money in every banks' reserve. If no one is taking loan (loan condition raised by banks, ironically by the request from the government), banks will spend these money by themselves. As a result, large amount of assets will be bought by the banks in the next decades

Banks buy assets, and if the price crashed, they sell assets to FED in exchange for money, and use new money to buy more assets...

[galdur]

Well. that´s great news and a huge relief especially since in its 2014 annual report the FDIC points out that its whole insurance fund constitutes just a fraction of a percent of all deposits in the system, and that its ‘reserve ratio’ is just 1.01%. So, all that bail-in talk we´ve been hearing is just pointless noise. And the simulation exercises that the U.S. has conducted  with the U.K. in recent years a totally useless waste of time.

[johnyj]

Well. that´s great news and a huge relief especially since in its 2014 annual report the FDIC points out that its whole insurance fund constitutes just a fraction of a percent of all deposits in the system, and that its ‘reserve ratio’ is just 1.01%. So, all that bail-in talk we´ve been hearing is just pointless noise. And the simulation exercises that the U.S. has conducted  with the U.K. in recent years a totally useless waste of time.

I guess that no one in government have the slightest idea about what is going on inside banks. Because of this, when things went wrong, they always make the wrong decision, and hit the most trivial part of the system. They bailout the bank by giving them the right to create trillions of dollars, and then banks use those dollars to enslave the nation. They tried to regulate banks, but their bailout is in fact the biggest deregulation

[galdur]

Well. that´s great news and a huge relief especially since in its 2014 annual report the FDIC points out that its whole insurance fund constitutes just a fraction of a percent of all deposits in the system, and that its ‘reserve ratio’ is just 1.01%. So, all that bail-in talk we´ve been hearing is just pointless noise. And the simulation exercises that the U.S. has conducted  with the U.K. in recent years a totally useless waste of time.

I guess that no one in government have the slightest idea about what is going on inside banks. Because of this, when things went wrong, they always make the wrong decision, and hit the most trivial part of the system. They bailout the bank by giving them the right to create trillions of dollars, and then banks use those dollars to enslave the nation. They tried to regulate banks, but their bailout is in fact the biggest deregulation

Goldman Sachs usually appoints the Sec. of Treasury which then plays with the heads of the dumbasses in Wash. D.C. We´ll have to see how this all goes this time. Good luck, g

[aso118]

Well. that´s great news and a huge relief especially since in its 2014 annual report the FDIC points out that its whole insurance fund constitutes just a fraction of a percent of all deposits in the system, and that its ‘reserve ratio’ is just 1.01%. So, all that bail-in talk we´ve been hearing is just pointless noise. And the simulation exercises that the U.S. has conducted  with the U.K. in recent years a totally useless waste of time.

I guess that no one in government have the slightest idea about what is going on inside banks. Because of this, when things went wrong, they always make the wrong decision, and hit the most trivial part of the system. They bailout the bank by giving them the right to create trillions of dollars, and then banks use those dollars to enslave the nation. They tried to regulate banks, but their bailout is in fact the biggest deregulation

Too big to fail is one concept they have become aware of after the crisis. If there is actual action on this front, then we can feel happy that the government has learnt something. It is definitely a costly lesson, but if it helps avert the next crisis, nothing like it.

[lissandra]

well the sad part is, we cant do much.

despite the whole 2008 crisis, theres no form of protecting our money besides btc being the only option.

[neurotypical]

Wall Street and the Fed will take this market higher until all retail is in. However long that takes.

All about the transfer of wealth.